[Federal Register Volume 62, Number 94 (Thursday, May 15, 1997)]
[Proposed Rules]
[Pages 26755-26757]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-12513]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Parts 1, 301, and 601

[REG-209837-96 and REG-105299-97]
RIN 1545-AU42 and 1545-AV20


Requirements Respecting the Adoption or Change of Accounting 
Method; Extensions of Time To Make Elections

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Notice of proposed rulemaking by cross-reference to temporary 
regulations.

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SUMMARY: In the Rules and Regulations section of this issue of the 
Federal Register, the IRS is issuing temporary regulations relating to 
the procedure for requesting a change in accounting method and to the 
standards for granting an extension of time to request a change in 
accounting method. The regulations provide for a longer period of time 
for filing an application for change in accounting method with the 
Commissioner. The regulations also provide that an extension of time to 
file an application for change in accounting method will be granted 
only in unusual and compelling circumstances. The

[[Page 26756]]

regulations affect taxpayers requesting a change in method of 
accounting for federal income tax purposes. The text of those temporary 
regulations also serves as the text of these proposed regulations.

DATES: Written comments must be received by August 13, 1997.

ADDRESSES: Send submissions to: CC:DOM:CORP:R (REG-209837-96 and REG-
105299-97), room 5228, Internal Revenue Service, POB 7604, Ben Franklin 
Station, Washington, DC 20044. Submissions may be hand delivered 
between the hours of 8 a.m. and 5 p.m. to: CC:DOM:CORP:R (REG-209837-96 
and REG-105299-97), Courier's Desk, Internal Revenue Service, 1111 
Constitution Avenue NW, Washington, DC. Taxpayers may also submit 
comments electronically via the internet by selecting the ``Tax Regs'' 
option on the IRS Home Page, or by submitting comments directly to the 
IRS internet site at http://www.irs.ustreas.gov/prod/tax____regs/
comments.html.

FOR FURTHER INFORMATION CONTACT: Cheryl L. Oseekey, (202) 622-4970 (not 
a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

    Temporary regulations in the Rules and Regulations section of this 
issue of the Federal Register amend Regulations on Income Taxes (26 CFR 
part 1), the Regulations on Procedure and Administration (26 CFR part 
301), and the Statement of Procedural Rules (26 CFR part 601) relating 
to the requirements for changes in method of accounting and extensions 
of time to make elections. Proposed and temporary regulations relating 
to extensions of time to make elections were published in the Federal 
Register for June 27, 1996 (61 FR 29714 and 61 FR 33365). These 
regulations extend the time for filing an application for change in 
accounting method under Sec. 1.446-1(e)(3)(i) and amend Secs. 301.9100-
1T and 301.9100-3T to provide that an extension of time to file an 
application for change in accounting method will be granted only in 
unusual and compelling circumstances.
    The text of those temporary regulations also serves as the text of 
these proposed regulations. The preamble to the temporary regulations 
explains the rules provided by the regulations.

Special Analyses

    It has been determined that this notice of proposed rulemaking is 
not a significant regulatory action as defined in EO 12866. Therefore, 
a regulatory assessment is not required. It also has been determined 
that section 553(b) of the Administrative Procedure Act (5 U.S.C. 
chapter 5) does not apply to these regulations. Sections 1.446-
1(e)(3)(i) and 601.204(b) require a taxpayer to file a Form 3115, 
Application for Change in Accounting Method, with the Commissioner 
within the first 180 days of the taxable year in which the taxpayer 
desires to make the change. The proposed regulations in this document 
merely extend the time for filing the Form 3115 and, therefore, do not 
contain a new collection of information. Thus, because the regulations 
do not impose a collection of information on small entities, the 
Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply. 
Pursuant to section 7805(f) of the Internal Revenue Code, this notice 
of proposed rulemaking will be submitted to the Chief Counsel for 
Advocacy of the Small Business Administration for comment on its impact 
on small business.

Comments and Public Hearing

    Before these proposed regulations are adopted as final regulations, 
consideration will be given to any comments that are submitted timely 
to the IRS (a signed original and eight (8) copies if the comments are 
written). All comments will be available for public inspection and 
copy. A public hearing may be scheduled if requested in writing by a 
person that timely submits comments. If a public hearing is scheduled, 
notice of the date, time, and place for the hearing will be published 
in the Federal Register.

Drafting Information

    The principal author of these regulations is Cheryl L. Oseekey of 
the Office of Assistant Chief Counsel (Income Tax and Accounting). 
However, other personnel from the IRS and Treasury Department 
participated in their development.

List of Subjects

26 CFR Part 1

    Income taxes, Reporting and recordkeeping requirements.

26 CFR Part 301

    Employment taxes, Estate taxes, Excise taxes, Gift taxes, Income 
taxes, Penalties, Reporting and recordkeeping requirements.

26 CFR Part 601

    Administrative practice and procedure, Freedom of information, 
Reporting and recordkeeping requirements, Taxes.

Proposed Amendments to the Regulations

    Accordingly, 26 CFR parts 1, 301, and 601 are proposed to be 
amended as follows:

PART 1--INCOME TAXES

    Paragraph 1. The authority citation for part 1 continues to read in 
part as follows:

    Authority: 26 U.S.C. 7805. * * *

    Par. 2. Section 1.446-1 is amended by revising paragraph (e)(3)(i) 
to read as follows:


Sec. 1.446-1  General rule for methods of accounting.

    [The text of proposed paragraph (e)(3)(i) is the same as the text 
in Sec. 1.446-1T(e)(3)(i) published elsewhere in this issue of the 
Federal Register].

PART 301--PROCEDURE AND ADMINISTRATION

    Par. 3. The authority citation for part 301 continues to read in 
part as follows:

    Authority: 26 U.S.C. 7805. * * *

    Par. 4. In Sec. 301.9100-1, paragraph (h) is added to read as 
follows:


Sec. 301.9100-1  Extensions of time to make elections.

    [The text of proposed paragraph (h) is the same as the text of 
Sec. 301.9100-1T(h) published June 27, 1996, at 61 FR 33368, and 
amended elsewhere in this issue of the Federal Register].
    Par. 5. In proposed Sec. 301.9100-3, published June 27, 1996, at 61 
FR 33409, paragraph (c)(2)(i) is revised to reads as follows:


Sec. 301.9100-3  Other extensions.

    [The text of proposed paragraph (c)(2)(i) is the same as the text 
in Sec. 301.9100-3T(c)(2)(i) published elsewhere in this issue of the 
Federal Register.]

PART 601--STATEMENT OF PROCEDURAL RULES

    Par. 6. The authority citation for part 601 continues to read as 
follows:

    Authority: 26 U.S.C. 301 and 552. * * *

    Par. 7. In Sec. 601.204, paragraph (b) is revised to read as 
follows:


Sec. 601.204  Changes in accounting periods and in methods of 
accounting.

    [The text of proposed paragraph (b) is the same as the text in 
Sec. 601.204T(b)

[[Page 26757]]

published elsewhere in this issue of the Federal Register].
Margaret Milner Richardson,
Commissioner of Internal Revenue.
[FR Doc. 97-12513 Filed 5-14-97; 8:45 am]
BILLING CODE 4830-01-U